Lazard’s Girodolle Says Governments Should Pile on Public Debt
Lazard’s Girodolle Says Governments Should Pile on Public Debt
(Bloomberg) -- Lazard’s chief executive officer in France said governments should pile on debt to address the economic fallout from the coronavirus pandemic.
“You could almost say that the best way to reduce the deficit is to increase debt,” Jean-Louis Girodolle told Journal du Dimanche in an interview. “For states, this is an opportunity up for grabs.”
The European Central Bank has pledged a 1.35 trillion-euro ($1.6 trillion) bond-buying program and ultra-cheap loans for banks to help fund the recovery from the deepest recession in living memory. The ECB has also called on governments to play their part with fiscal stimulus. The flood of cash was praised by French President Emmanuel Macron on Friday.
“In Europe or in the U.S., the cost of debt is very limited,” Girodolle said. “Interest rates are low or non-existent and will remain so for a long while.”
While the merger and acquisition business slumped as companies focused on measures to combat the pandemic, Girodolle said investors are now exploring opportunities. Demand for Lazard’s debt-restructuring expertise has helped the bank weather the crisis, he said.
Girodolle expects more states and private investors to take stakes in companies that can’t repay their debt.
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